LightSquared files for bankruptcy
End of the line for 4G wannabe? Wanna bet?
Just hours before the expiration of a deal designed to keep it from defaulting on its debt, 4G wannabe LightSquared announced on Monday that it was filing for Chapter 11 bankruptcy protection.
"The filing was necessary to preserve the value of our business and to ensure continued operations," said the company's interim co-COO and CFO Marc Montagner in a statement. "The voluntary Chapter 11 filing is intended to give LightSquared sufficient breathing room to continue working through the regulatory process that will allow us to build our 4G wireless network.”
According to papers filed with the US bankruptcy court in in New York City, Bloomberg reports, LightSquared claims assets of $4.48 billion and debt of $2.29 billion as of the end of this February.
The Wall Street Journal notes that the bankruptcy petition was filed in advance of a 5pm Monday deadline of a debt-forbearance agreement. At the top of LightSquared's creditor list sits Boeing Satellite Systems, the bankruptcy petition notes, with a disputed claim of $7.5 million. Close behind is Alcatel-Lucent, with the disputed claim of $7.3 million.
Other debt includes a $322.3m loan and $1.7bn outstanding under a credit facility with UBS AG and Wilmington Trust FSB as agents, according to Bloomberg.
The up-and-down LightSquared saga, based on turning unused satellite-phone spectrum into a US 4G bonanza, has been heavily weighted to the downside recently, especially since the FCC ruled this February that it was withdrawing a waiver under which the company was planning to build its network, citing concerns that the LightSquared network would interfere with the Global Positioning System.
That said, observers can't be faulted for hearing a bit of whistling in the dark when Montagner comments about preserving "the value of our business" and securing "breathing room to continue working through the regulatory process." ®